A bipartisan Senate bill would encourage earlier ANDA filings by generics firms to head off new innovator patent listings and secure sole rights to 180-day exclusivity.

The bill, which limits 30-month stays to only those patents listed in the Orange Book before an ANDA filing and eliminates rolling 180-day exclusivity, could further fuel brand companies' complaints that generics firms are filing Paragraph IV certifications earlier and more frequently because they have little to lose.

The legislative proposal, outlined by sponsors Judd Gregg (R-N.H.) and Charles Schumer (D-N.Y.) during a June 5 briefing, has been "fast tracked" and is slated for markup in the Senate Health Committee June 11.

Sens. John McCain (R-Ariz.) and Edward Kennedy (D-Mass.) are cosponsoring the measure; Sens. Susan Collins (R-Maine) and John Edwards (D-N.C.) participated in the bill's negotiations.

A full Senate vote is expected within the next few months, with passage likely in light of the chamber's clearance of the McCain/Schumer generic drug reform proposal last summer (¹ Also see "GPhA Sees Generic Legislation Passing House After S 812 Clears Senate" - Pink Sheet, 5 August, 2002., p. 16).

In addition, Gregg's involvement in the development of the measure makes it a priority for the Health Committee chairman. The New Hampshire Republican opposed McCain/Schumer last year due to concerns it would stifle brand innovation and promote litigiousness.

The timeframe for action and the measure's fate in the House, which never acted on McCain/Schumer, seems more uncertain.

Reps. Jo Ann Emerson (R-Mo.) and Sherrod Brown (D-Ohio), who cosponsored the House version of McCain/Schumer, expect to introduce a companion bill to the new legislation.

Chances for passage also could be tied to Congress' consideration of Medicare Rx drug benefit legislation. Gregg said the Hatch/Waxman reform measure could "end up on the Medicare bill....Or it could be freestanding." The Senate Finance Committee plans to mark up a Medicare drug benefit bill June 12.

Under "The Greater Access to Affordable Pharmaceuticals Act," likely to become known as "Gregg/Schumer," brand name companies would be entitled to a single 30-month stay of approval on generic applications for patents listed in the Orange Book "at least one day before" an ANDA filing, according to a discussion ² draft of the bill.

The Gregg/Schumer measure specifies that for patents listed after an ANDA filing, a generic firm must file a Paragraph IV certification, but no additional 30-month stay will ensue.

If a patent owner does not sue for infringement within 45 days of receiving notice of the Paragraph IV certification, the ANDA filer may seek a declaratory judgment that the patent is invalid or not infringed.

The declaratory judgment provision marks a change from McCain/Schumer, which would have required a patent holder to bring an infringement action within 45 days of the Paragraph IV certification notice or surrender its rights to bring any type of infringement action for that patent against the ANDA applicant.

Gregg and Sen. Bill Frist (R-Tenn.), now the Senate majority leader, along with the Pharmaceutical Research & Manufacturers of America, opposed the provision, asserting it would force brand companies to sue quickly or forfeit their patent rights (³ Also see "Senate Generic Drug Bill Would Allow Challenges To Orange Book Listings" - Pink Sheet, 15 July, 2002., p. 17).

The Gregg/Schumer proposal provides a wider window for patent listings than McCain/Schumer but a narrower opportunity than that suggested by FDA in its October 2002 proposed rule reforming Hatch/Waxman (⁴ Also see "FDA Patent Listing Criteria Allow Polymorph, Product-By-Process Claims" - Pink Sheet, 28 October, 2002., p. 8).

FDA's proposal also would limit innovators to one 30-month stay but places no time restriction on the stay. Generic firms had expressed concerns that under the proposed rule innovators would still be allowed to list a patent shortly before ANDA approval, thus triggering a Paragraph IV filing and 30-month stay on the eve of generic launch.

McCain/Schumer provided for a 30-month stay only on Paragraph IV challenges to patents listed in the Orange Book within 30 days following an innovator's NDA approval.

The Gregg/Schumer measure also appears to address the generic industry's concern that FDA's proposed regulatory reform would not assure late-listed innovator patents are litigated in a timely manner.

The Generic Pharmaceutical Association has cited this issue as one of the key reasons why regulatory reform alone is insufficient and Congressional revisiting of Hatch/Waxman is warranted.

However, Gregg/Schumer's 30-month stay provisions, which would give even more value to an early ANDA filing, creates challenging trade-offs for the generics industry. Rushed ANDA filings aimed at heading off additional patent listings by an innovator could come at the expense of appropriate due diligence.

In addition, while Gregg/Schumer retains 180-day exclusivity for the first filer, it provides for no secondary or rolling exclusivity if the first filer forfeits its rights to exclusivity - further increasing the incentive to be first to file.

"If an ANDA applicant forfeits exclusivity, it is not available to any other generic company, and generic approvals are immediately effective," a summary of the Gregg/Schumer legislation states. Under McCain/ Schumer, if the first filer forfeited its rights to 180 days, exclusivity could be awarded to a subsequent applicant.

Although Gregg/Schumer does not contain any provision on what types of patents may be listed in the Orange Book, it provides generics with an "enforcement mechanism" to prevent patent listing abuses. ANDA filers who are sued over a Paragraph IV certification would be able to file a counterclaim seeking to delist the patent or correct listing information.

The Federal Trade Commission suggested the counterclaim remedy in its report on Hatch/Waxman (⁵ Also see "FTC Backs Single 30-Month Stay On Generic Approvals In Patent Litigation" - Pink Sheet, 5 August, 2002., p. 15). The FTC report and FDA's proposed regulatory changes have served as a springboard for Congressional discussions on Hatch/Waxman reform.

FDA is moving forward on a final rule, which was received by the Office of Management & Budget on May 22 and is tentatively slated for release this month. However, the new legislative proposal could leave the fate of that reg up in the air.

During the press briefing, Gregg and Schumer noted FDA previously has asserted it is statutorily constrained in the extent to which it can modify its generic drug approval regulations.

"I'm hopeful that the FDA, when they see this, they'll say we're supportive of this and we don't need the regulation, but that will be up to them," Schumer said.

Senate Generic Reform Bill Likely To Result In Earlier ANDA Filings

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